Federal Court of Australia

Calvisi (Liquidator) v GRL Pty Ltd (in liq), in the matter of GRL Pty Ltd [2026] FCA 1030

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 90-15 of the Insolvency Practice Schedule (Corporations), being Sch 2 to the Corporations Act 2001 (Cth) (Corporations Act), an order that the plaintiff, in his capacity as liquidator of the defendant, is justified and acting reasonably in proceeding on the basis that:

(a)    the defendant carried on business in its capacity as trustee of the Ludtke Family Trust ABN 82 965 773 416 (Trust) being the trust established by deed dated 2 July 2004 between Ian Anderson as settlor and the defendant as trustee;

(b)    the following assets of the defendant are properly characterised as property held by it as trustee of the Trust:

(i)    the property described as Lot 10182 in Plan L2008/078B, also known as 46 Daldawa Terrace, Lyons NT 0810; and

(ii)    the property described as Lot 410 on Plan of Subdivision 510551S, also known as Suite 410, Level 4, 365 Little Collins Street, Melbourne VIC 3000.

2.    Pursuant to s 57(1) of the Federal Court of Australia Act 1976 (Cth), the plaintiff be appointed nunc pro tunc without security as receiver and manager over the business and assets of the Trust (Receiver).

3.    The need for the Receiver to file a guarantee pursuant to rr 14.21(b) and 14.22 of the Federal Court Rules 2011 (Cth) be dispensed with.

4.    The Receiver have, in respect of the business and assets of the Trust, the powers that a receiver has in respect of the business and property of a company pursuant to s 420 of the Corporations Act (other than ss 420(2)(s), (t), (u) and (w)) as if the reference in that section to “the corporation” were a reference to the Trust including, without limitation, the power to do all things necessary or convenient to:

(a)    carry on the business of the Trust;

(b)    employ any person in connection with the business of the Trust;

(c)    sell the assets of the Trust;

(d)    pay the creditors of the Trust from the proceeds of the assets, pursuant to the priorities prescribed under the provisions of the Corporations Act;

(e)    compromise any claim made against the defendant in his capacity as trustee of the Trust or against any of the Trust property on any terms the Receiver sees fit;

(f)    bring any claim against any party on behalf of the Trust; and

(g)    execute any tax returns, financial statements or other documents relating to the Trust.

5.    The plaintiff, in his capacity as liquidator of the defendant and as receiver of the Trust assets, is entitled to be paid from the proceeds of the sale of the Trust assets:

(a)    the remuneration, costs and disbursements (including legal costs) incurred by the plaintiff in his capacity as the Receiver, including the costs of this application, to be paid in priority from the Trust assets on an indemnity basis; and

(b)    the remuneration, costs and disbursements (including legal costs) incurred by the plaintiff relating to general insolvency matters, to the extent that the remuneration, costs and disbursements concern the administration of the Trust.

6.    There be liberty to apply to:

(a)    the Receiver or further orders and/or directions including in relation to the Receiver’s remuneration; and

(b)    any person who can demonstrate sufficient interest to modify or discharge orders 2 to 5 above, such liberty to be exercised on not less than 48 hours’ written notice to the plaintiff.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

DERRINGTON J:

Introduction

1    This is an application by Mr Dino Calvisi, as liquidator of GRL Pty Ltd (GRL), for a number of orders that generally relate to the appointment of him as a receiver of the property of a trust formerly under the stewardship of GRL. The need for the orders sought arises from the insolvency of GRL and its cessation as trustee.

2    For the reasons which follow, the application should be granted.

Background

3    GRL was incorporated on 19 June 1973. Some 31 years later, GRL was appointed the sole trustee of the Ludtke Family Trust (Trust) by a trust deed dated 2 July 2004 (Trust Deed).

4    It appears from the evidence that, in its capacity as trustee, GRL made investments and incurred liabilities. Notably, it acquired two properties, one at 46 Daldawa Terrace in Lyons in the Northern Territory (the “NT Property”), and another at Suite 410, Level 4, 365 Little Collins Street, Melbourne, Victoria (the “Victoria Property”), which it continues to hold as trustee. Both properties are the subject of mortgages to the National Australia Bank (NAB).

5    Mr Calvisi was appointed liquidator of GRL by an order of the Supreme Court of Victoria on 25 February 2026. Upon that appointment, GRL ceased to hold the position of trustee of the Trust, pursuant to cl 10 of the Trust Deed. Such a clause is not uncommon.

6    The liquidator has undertaken a number of investigations into the books and records of GRL, but it is apparent that they do not clearly delineate the assets and liabilities of the Trust and those of GRL in its own right. Nevertheless, there is presently no trustee of the Trust other than GRL, which remains a bare trustee notwithstanding that its appointment under the Trust Deed has terminated.

7    The NT Property and Victoria Property are the main focus of this application. As to the former, GRL acquired it on or about 26 October 2010, and the records clearly establish that it did so in its capacity as trustee.

8    In contrast, the liquidator is unable to positively confirm whether, when GRL acquired the Victoria Property on or around 11 November 2009, it did so in its capacity as trustee or in its own right. A title search of the property does not suggest that it is held by GRL as trustee, though it appears that such an identification is not required on the titles register in Victoria. Nevertheless, the mortgage over the property in favour of NAB indicates that the property is held by GRL in that capacity. This is a sufficient basis upon which to confirm that the liquidator should proceed upon the assumption that GRL acquired the property as trustee. In reaching that conclusion, it is apt to acknowledge the care generally taken by Australian banks to identify the capacity in which mortgagors hold property.

9    Relevantly, it appears that NAB has indicated an intention to exercise its power to sell the Victoria Property as mortgagee in possession. It is, therefore, unlikely that, if Mr Calvisi is appointed as receiver, he would be required to take action in respect of it.

10    The material before the Court demonstrates that NAB supports Mr Calvisi’s appointment as receiver to facilitate the sale of the NT Property. Though it appears that the former director of GRL, Mr Mark Ludtke, attempted to sell the NT Property on 9 March 2026, any contract of sale is likely to have been invalidly executed owing to the suspension of his powers as director consequent upon the appointment of a liquidator. Notwithstanding, that potential sale appears to be an opportunity which Mr Calvisi might pursue. If it remains available and he is satisfied with its terms and conditions, it is likely that he will exercise his commercial judgment to proceed with it.

11    This application obviously has some potential impact on third parties. Very properly, the solicitors for the liquidator have given notice to a number of people, including ASIC, NAB and Mr Ludtke. There is no opposition made to the making of the orders sought.

Should the orders sought be made?

Liquidator’s treatment of the trust property

12    Mr Calvisi seeks orders pursuant to s 90-15 of the Insolvency Practice Schedule (Corporations) (IPS), contained in Schedule 2 to the Corporations Act 2001 (Cth) (Corporations Act), confirming that he is justified and acting reasonably in proceeding on the basis that (a) GRL has acquired investments and incurred liabilities in its capacity as trustee of the Trust, (b) the NT Property is properly characterised as property of the Trust, and (c) GRL’s creditors include creditors whose debts have been incurred by GRL in its capacity as trustee of the Trust.

13    Having regard to the foregoing discussion (see supra [3] – [11]), the available material supports the making of the orders sought. They should be made to allow the liquidator to proceed with the winding up of GRL accordingly.

Appointment as receiver

14    A further order sought by Mr Calvisi is that he be appointed as receiver of the assets of the Trust. The power to make such an order derives from s 57(1) of the Federal Court of Australia Act 1976 (Cth), which empowers the Court to, at any stage of proceedings, appoint a receiver on such terms and conditions as it thinks fit, if it is just and convenient to do so.

15    The principles governing the Court’s exercise of the broad power in s 57(1) were collected and assayed by Moshinsky J in Re Cremin and Brimson (2019) 136 ACSR 649, 655 – 656 [48] – [51] as follows:

[48]     A company that is the trustee of a trading trust has a right of indemnity to resort to the trust assets to vindicate its right to be exonerated from a liability that it has incurred in the course of carrying out trust business. In circumstances where such a company goes into liquidation, its right of indemnity and accompanying equitable lien over the trust assets endures, notwithstanding that the company has been removed as trustee of the trust and only holds the trust assets as a bare trustee: see Jones v Matrix Partner Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (in liq) (2018) 260 FCR 310 (Jones & Matrix) at [85], [142], [198].

[49]     There has, until recently, been a difference of opinion as to whether, in such circumstances, the liquidator’s power to sell the “property of the company” in s 477(2)(c) of the Corporations Act permits him or her to sell trust assets: see Aced Kang Investments Pty Ltd (in liq), in the matter of Aced Kang Investments Pty Ltd (in liq) [2017] FCA 476 at [12]. It is now settled that the liquidator of an insolvent (former) corporate trustee cannot sell the trust’s property without order of the Court, or by appointment of a receiver over the trust assets: see Jones & Matrix at [44] per Allsop CJ (Farrell J agreeing at [196]); Re Stansfield DIY Wealth Pty Ltd (in liq) (2014) 291 FLR 17 at [10]; Apostolou v VA Corporation of Aust Pty Ltd [2011] FCAFC 103 at [45]. The rationale for this position is that, on a proper understanding, the trust assets are not the “property of the company”, but are instead trust property in which the corporate trustee has a proprietary interest by way of lien or charge to secure its right of exoneration: see Jones & Matrix at [89]. Thus, to the extent that the subject of a sale is the whole of a trust asset, rather than merely the company’s lien or charge in respect of that asset, it is not authorised by the power of sale in s 477(2)(c).

[50]     The courts are generally willing, upon an appropriate application, to make orders permitting the liquidator of a (former) corporate trustee to sell trust assets. In situations where the property of the trust will be exhausted following its sale and subsequent distribution to creditors, it may be appropriate merely to give the liquidator a power of sale: see Jones & Matrix at [91]. The more common course is, however, for the liquidator of the insolvent (former) corporate trustee to apply to be appointed a receiver for the purpose of selling the trust assets and distributing the proceeds among trust creditors: see Jones & Matrix at [142] per Siopis J; Amirbeaggi, in the matter of Simpkiss Pty Ltd (in liq) [2018] FCA 2121 (Amirbeaggi); Taylor v CJ & KL Bond Super Pty Ltd, in the matter of CJ & KL Bond Pty Ltd (in liq) [2018] FCA 1430 (Taylor v CJ & KL Bond Super Pty Ltd); Staatz v Berry, in the matter of Wollumbin Horizons Pty Ltd (in liq) (No 3) [2019] FCA 924. Orders appointing a liquidator as a receiver for this purpose may be made nunc pro tunc to authorise sales of trust assets that have already occurred: Jones & Matrix at [91], [152], [198].

[51]     The proceeds from an exercise of a corporate trustee’s right of exoneration may only be applied in satisfaction of the trust liabilities to which that right relates: see Carter Holt Harvey Woodproducts Australia Pty Ltd v Commonwealth [2019] HCA 20 (Carter Holt) at [40] per Kiefel CJ, Keane and Edelman JJ; at [92] per Bell, Gageler and Nettle JJ; at [106] per Gordon J. Thus, the liquidator of a (former) corporate trustee may only apply the proceeds of a sale of trust assets to satisfy debts owed to trust creditors (as opposed to general creditors). This includes the costs of the liquidation (including the liquidator’s remuneration) because such costs constitute debts incurred by the company in discharging the duties imposed by the trust: Re Suco Gold Pty Ltd (in liq) (1983) 33 SASR 99 at 110 per King CJ; Jones v Matrix at [105]-[106]. In circumstances where a company has only ever acted as a trustee of one trust and that has been the totality of its affairs, no issue arises as to the application of trust assets to general creditors because all of the company’s creditors are trust creditors. In this situation, the proceeds from the exercise of the right of exoneration are to be distributed to the trust creditors in accordance with the order of priority prescribed by the Corporations Act: Jones & Matrix at [100]-[108] per Allsop CJ; see also Carter Holt at [93]-[96] per Bell, Gageler and Nettle JJ; at [111], [156]-[158] per Gordon J.

16    It is beyond doubt that the orders are sought by Mr Calvisi are for the purpose of allowing him to proceed with the winding up of GRL, and to meet the debts of the Trust from its assets. However, an important consideration is ensuring that Trust assets are not applied to liabilities incurred by GRL in its own right. That possibility has been minimised by Mr Calvisi’s solicitor, Mr Smouha, who has proposed orders which have been carefully and appropriately drafted to ensure that only the liabilities incurred by GRL as trustee of the Trust are discharged out of the Trust assets. It is, therefore, appropriate to make the orders sought.

Ancillary orders

17    Some ancillary orders are also sought by Mr Calvisi. Firstly, he seeks an order dispensing with the need for a receiver to file a guarantee pursuant to rr 14.21(b) and 14.22 of the Federal Court Rules 2011 (Cth). That is appropriate in this case, given that Mr Calvisi is a registered liquidator and is subject to the supervisory powers of the Court under the Corporations Act.

18    Second, Mr Calvisi seeks an order that his remuneration, costs and disbursements incurred in his capacity as receiver of the Trust, including the costs of this application, be paid in priority from the Trust assets. He also seeks a related order that his remuneration, costs and disbursements related to general insolvency matters, be paid in priority from the Trust assets to the extent that such costs concern the administration of the Trust. Such orders are of a quotidian nature and follow from the consequence that the liquidator is required to effectively administer the trust.

19    There is, however, a slight issue for Mr Calvisi to the extent that he has encountered difficulties distinguishing between assets acquired and liabilities incurred by GRL in its capacity as trustee and those acquired and incurred in its own right. To that end, Mr Smouha correctly acknowledged that the proceeds of the sale of the Trust assets may only be applied to liabilities incurred in the course of the business of the Trust: Carter Holt Harvey Woodproducts Australia Pty Ltd v Commonwealth (2019) 268 CLR 524, 547 – 548 [40]. Though this may give rise to some difficulties, it is likely that they will be ameliorated as further information comes to light.

20    One further issue concerns Mr Calvisi’s costs and expenses of this application, and his attempts to distinguish trust assets and liabilities from those acquired and incurred by GRL in its own right. In this regard, reference was made on his behalf to what was said in Lane (Trustee), in the matter of Lee (Bankrupt) v Deputy Commissioner of Taxation (2017) 253 FCR 46 at 108 – 109 [189]:

[189]     Necessarily, the scope and value of the right of exoneration and the use to which it might be put can only be known after substantial work is completed in relation to the insolvent trustee’s affairs. Such work, includes identifying the assets of the trustee and distinguishing between those which are beneficially owned and those which are held on trust; identifying the liabilities of the trustee and distinguishing between the trust and non-trust liabilities; recovering the trust assets which are sufficient to meet the right of exoneration; realising or attempting to realise trust assets; ascertaining the state of account as between the trustee and the beneficiaries; and, if there is a balance in favour of the trustee, exercising the right of exoneration from the fund of money created. Unless this work is undertaken the right of exoneration cannot be applied in favour of the trust creditors. Any receiver appointed by the Court at the suit of the trust creditors would need to perform those tasks in order to secure payment to those entitled. In cases such as the present, the intervention of the trustee’s insolvency has prevented the trustee from being able to discharge the trust debts and the Act obliges the Bankruptcy Trustees to assume the trustee’s responsibility and discharge the trust debts. Regardless of how the matter is viewed, the work identified had to be completed and paid for in order that the trust creditors’ claims are met.

21    Here, Mr Calvisi’s application was necessary in order to realise the Trust assets for the benefit of its creditors. The application was brought reasonably and in good faith such that the costs of the application should be borne by Trust assets, either directly or under the trustee’s indemnity. Similarly, Mr Calvisi’s claim for remuneration, costs and disbursements incurred in his capacity as receiver of the Trust should be treated as liabilities properly incurred in relation to the administration of the Trust.

Conclusion

22    There is no doubt in this case that the application brought by the liquidator was properly made and necessary to finalise the liquidation of GRL. In those circumstances, it is appropriate to make the orders in the draft provided, with some slight amendments.

Note

23    These are the amended and revised reasons for judgment given on 10 July 2026. Whilst the reasons given above refine and develop those that were delivered ex tempore, the substance of what was said that day has not been changed nor has any other material change been made.

Associate:    

Dated:    30 July 2026